After the amount of the 2025 Budget was denied, what will happen with the financing law?

This Wednesday, September 11, The economic commissions of the Congress of the Republic denied the amount for the General Budget of the Nation (PGN) for 2025. They did not accept the 523 billion pesos that the Government is seeking, but they did not approve proposals such as those of the senator either. Angelica Lozano (499 billion pesos) and that of Efrain Cepeda (511 billion pesos), president of the Legislature.

(See: Amid strong controversy, Congress denied the amount of the 2025 Budget).

This situation raises alarm, since The deadline for approving the amount of the PGN expires on September 15. In addition, it puts on the table the future of the financing law that the Government recently submitted to Congress on Tuesday, September 10.

It must be remembered that this financing law seeks to obtain 11.8 billion pesos, value with which next year’s PGN would be completed (523 billion pesos), since it is underfunded.

“Reducing the amount of spending takes away the Government’s chances of considering the financing bill, for which no one has yet been identified.“, he said Henry Amorocho, professor of Public Finance and Budget at the Faculty of Law of the Universidad del Rosario.

(See: What is the fiscal dictatorship and what is its relationship with the National Budget).

Amorocho also explained that if the decision is made to set the PGN to 511 billion pesos or less, the financing law would ‘die’.

“This project can no longer be treated as a financing bill, because there would no longer be justification for closing a deficit (that of the PGN), since Congress would be reducing it.“, said.

That being the case, the future of the financing law would be for it to be withdrawn and presented as a tax reform bill, outside the Budget, it would no longer operate to finance it.

One of the proposals for the PGN, precisely, proposes that The budget will be 511 billion pesos for 2025 and a tax reform will be presented next year. The head of the idea is Senator Efraín Cepeda.

(See: Details of the debate in which the amount of the 2025 PGN was not approved).

Without an agreement on the amount, what is next for the Budget?

The amount of the 2025 Budget must be approved by Saturday, September 14 at 11:59 p.m. But what happens if that is not achieved?

Congressmen would have a new deadline to agree on the amount until September 25, when the budget should be approved in the first debate. If this is not possible, the debate could go on until October 20, when Congress has to finish the legislative process.

(See: Budget by decree opens the door for Colombia to enter into fiscal dictatorship).

However, Professor Amorocho said that if it is not approved a Budget spending amount (also known as an appropriations amount or spending goal), “This would be negligence on the part of Congress, Law 5 of 1992 would be violated and a disciplinary investigation would be opened for failure to fulfill its duties, and I do not believe that the Legislature would be willing to assume that cost.“.

In the hypothetical case that Congress fails to agree on the amount by October 20, the door would be opened for it to be issued by decree by the President of the Republic.

“Article 348 of the Constitution states that ‘if Congress does not issue the Budget, the one presented by the Government would prevail’, that is, the one of 523 billion pesos.“, Amorocho said, adding that this would be possible based on constitutional article 347 and as long as the Executive (in the case of the PGN for 2025) justifies, with studies, the 11.8 billion pesos that would come from the financing law.

Yes indeed, Amorocho is emphatic in stating that he believes Congress will reach an agreement on the amount before September 15.

PORTFOLIO